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COLOMBIA: Poverty – the Old, the New and the Newest

Helda Martínez

BOGOTA, Oct 16 2006 (IPS) - The fight against poverty is currently a focus of controversy in Colombia, with the government and its critics arguing now not about the percentages, but about how they are calculated.

According to official statistics, 49.2 percent of Colombia’s population of 42 million lives in poverty, defined as a monthly income of less than 225,000 Colombian pesos (94 dollars), equivalent to about 55 percent of the national minimum monthly wage of 408,000 pesos (170 dollars).

The government estimates that the cost of the basket of basic goods and services including food, housing, public services, education and medicines runs to 94 dollars a month. But critics put the cost much higher.

People living in extreme poverty, or indigence, are defined as those with an income of up to 37.6 dollars a month, or 1.2 dollars a day, who can only barely cover the cost of food.

Deciding what goods and services should be included in the basket is a political statement of what a society considers to be essential for human development and, in contrast, what constitutes poverty.

That is why analysts point out that the figures will vary according to how the measurements are made and how the results are read.

This assertion was further discussed by economist Ricardo Bonilla, a professor at the state National University and co-author of the study “Well-Being and Macroeconomics 2002-2006: Inequitable Growth Is Not Sustainable”, published in July 2006 by the Centre for Development Research (CID) and the Office of the Comptroller General.

“The government’s figures were arrived at by the Poverty Mission (Mission to Design a Poverty Reduction Strategy), contracted by the government with the support of the Inter-American Development Bank and national and international institutions, in order to study the situation in Colombia since 1990, and establish the ‘newest’ family basket for 2005 to the value of 225,000 pesos a month,” Bonilla told IPS.

In accordance with the Mission’s recommendations, the “newest” basket replaced two earlier ones: the “old” family basket, established 21 years ago, and the “new” basket, calculated 11 years ago.

The value of the “new” basket was relatively high, according to the government, and was never officially accepted.

The “new” basket would have been worth 121 dollars at 2005 prices – 27 dollars more than the “newest” – and would have led to a national poverty rate of 60 percent.

Measurements by non-governmental organisations critical of the official figures yield a poverty rate of 70 percent, given that 45 percent of the wealth is in the hands of 10 percent of the population, while the remaining 55 percent is distributed among 90 percent of Colombians, but goes especially to the middle class, Bonilla explained.

Luis Daniel Campos, adviser to the United Nations resident representative in Colombia, said that “the Poverty Mission is an aggregate of people seeking to channel public policies in ways that will end the poverty trap. Positive external measures are needed, because otherwise some sectors will never escape from poverty.”

“At the United Nations, we contribute our experience,” said Campos. “Knowing that poverty cannot be eradicated all at once, we support those measures that bring the best results.”

On Tuesday Oct. 17, World Day for the Eradication of Poverty, the Mission will publicly present the strategy it has prepared for the reduction of poverty and inequality in Colombia.

Campos said that the Mission had used scientific measures whose result will be announced Tuesday when the document is handed over to President Álvaro Uribe.

However, the World Bank’s definition of poverty, adopted by the United Nations, according to which people are poor if they are living on two dollars a day, and indigent if their income is one dollar a day, is not exempt from the relativity of measurements..

“These figures are related to particular country conditions and to the relative value of the dollar. In Colombia, where the dollar began to rise in value three years ago, there are less poor and extremely poor people,” Bonilla said.

According to the Poverty Mission’s measurements, the proportion of poor people in Colombia was below 50 percent in 1994, 1995 and 2005.

“And so it will be again in 2006. But what happened in years when the economy grew less than five percent, and during the recession (in the late 1990s) when economic growth fell by at least four percent?” Bonilla asked.

At those times, “the poverty rate reached 57 percent when calculated on the basis of the ‘newest’ basket. If the ‘newest’ basket were not the measuring stick, at best the poverty rate would have been 60 percent, and at worst 70 percent,” he said.

Some economic analysts are convinced that the “newest” basket and the Poverty Mission are part of a government strategy.

Activist Alberto Yepes, coordinator of the “No Excuses 2015, Colombia Without Poverty” campaign, argued that one of the main causes of the growing impoverishment were the labour reforms adopted in 2002, which the government at the time argued would create new jobs.

Opponents of the right-wing government say that the reforms shifted income away from the poor and increased profits for the rich. “They cut Sunday, holiday and overtime pay, and extended the working day to 10 p.m., while wages for unqualified workers have fallen,” Yepes said.

“Women have been the hardest hit. ‘Maquilas’ (export assembly factories) are proliferating as part of the country’s adjustment to the competitiveness demanded by the FTA (the free trade agreement negotiated with the United States). That’s the way they’re working now in the flower, banana and clothing industries,” Yepes said.

So what role will Colombia play in future in the international campaign against poverty?

“In general, the government has not taken the Millennium Goals seriously. It has taken five years to formulate a strategy,” Yepes said.

The eight Millennium Development Goals (MDGs) were adopted by the international community in 2000 as a broad platform to drastically reduce global inequality and poverty.

The first goal is to halve the proportion of extremely poor and hungry people in the world by 2015, taking 1990 levels as the baseline.

On Tuesday the government will report on the progress made towards the MDGs, amid a month of protests by local and international civil society organisations as part of the campaign “STAND UP Against Poverty”, which started on Sep. 16 and ends on Tuesday, organised by the Global Call to Action Against Poverty (GCAP) network.

Last Thursday, residents of the northwestern city of Medellín gathered in front of the headquarters of the municipal public services companies, with the slogan “Either we eat, or we pay (our utility bills)”.

On Tuesday there will be teach-ins and awareness raising activities in the central square of the National University of Colombia, in Bogotá.

On Oct. 20, activists are planning to occupy Bolívar Square in the centre of the capital. Dressed in white and wearing coloured masks, participants will demand that top priority be given to effectively fighting poverty.